March 9th, 2007

When the Collectors Come Calling

photo credit: Michael P

Thanks to Chris for passing along a link to a CBS interview with David Walker, Comptroller General. The 11 minute video can be accessed here. Please watch it, take a few deep breaths, then come back.

“Fiscal cancer” is the perfect metaphor for our nation’s current economic situation. Our pathetic politicians deserved to be continuously lambasted for their inaction and fiscal lethargy for not fixing the system. Too much rhetoric and wheel spinning gives the illusion of progress, but the situation continues to decline. The only one I’m aware of calling the shots as they are is Ron Paul. Half of his articles deal exactly with these issues, but as he describes in this video, his fellow congressmen don’t listen. It’s far too easy to pass the buck down to the next Congress and the next generation.

Comptroller General Walker’s video interview, while encouraging, fails to address two additional core issues at the heart of our economic crisis.

The Federal Reserve

When asked what the government might to do raise more money, Walker suggests some possibilities, raising taxes and cutting government funding among them. But this isn’t the way things it has been done in recent decades. Politicians don’t like to raise taxes because it is highly unpopular and they risk losing their seat. And they certainly don’t like cutting funding to their pet projects and personal pensions. What to do, what to do…

That’s where the “Federal” Reserve comes in. Our government simply issues orders for more money, and the fiat currency is literally created from thin air. This increasing of the money supply is the root cause of inflation.

The gimmick can only go on for so long, and pretty soon we will surely learn that what goes up must come down. The immoral inflating of the money supply to pay for government programs and wars has led to a dollar that is worth 4 percent of its original value. 4 percent!

Foreign markets are abandoning the dollar and diversifying their assets, meaning that they are losing trust in the dollar. There will soon come a point where the greenbacks will be downright rejected as countries and central banks refuse to give America goods and services for which it cannot pay. Why foreign markets have put up with the dollar for so long amazes me. They surely do not realize the magic trick that is the Federal Reserve. Money does grow on trees in the USA, despite what your parents told you! Those trees are called printing presses.

Foreign Debt

Walker also neglects (largely due to time constraits, I’m sure) the fact that foreign nations hold a large amount of our national debt. Our nation is in financial bondage to other major world powers who have given us goods and services in exchange for our magical Federal Reserve Notes. President Bush should be harshly condemned for breaking the record of all other presidents combined in creating foreign-held debt. From the linked article:

Throughout the first 224 years (1776-2000) of our nation’s history, 42 U.S. presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions according to the U.S. Treasury Department. In the past four years alone (2001-2005), the Bush Administration has borrowed a staggering $1.05 trillion.

Which countries hold the majority of our debt? Japan is the largest with China and the UK in the runner-up positions. See this chart, this PDF from 2004 and this one from 2005 for more information.


What else can be concluded from such evidence other than the simple fact that our nation is heavily in debt, especially to foreign powers who will soon reject our magic paper currency and turn from creditor to collector?

Mark my words: The collectors will come calling. Anybody who has dealt with collections knows that these are not nice people. As creditors they are kind because you are paying them with added interest on a fractional reserve banking scheme that transfers your wealth to them. But when they realize you cannot make good on the credit, they get upset.

Really upset.

Read quotes about “debt” on Quoty

4 Responses to “When the Collectors Come Calling”

  1. Connor
    March 10, 2007 at 8:43 pm #

    Ron Paul wrote up a good commentary on Walker’s interview as well.

  2. Kelly Winterton
    March 11, 2007 at 9:52 am #

    Back in the olden days, prophets would speak to us at the pulpits about the dangers of Communism. Nowadays, we saints have forgotten all about that red scare. Prophets of God no longer talk to us about the red scare, because Reagan said to tear down the wall. All is well in Zion. Now, China holds the debt of the USA in their hands, and our future as well. Now that communist China controls our economy, all they have to do to literally destroy USA as a nation, is to stop holding our debt. (read Revelation chapter 18) I guess it’s time to elect someone more fiscally responsible, someone who is not afraid to tell Americans to stop our wantonous lifestyles.

  3. Connor
    March 19, 2007 at 4:13 pm #

    Kudos to Chris for sending me a link to this CNN video highlighting the fact that the Chinese have the largest foreign currency reserve in the world and are wondering what to do with it. What better opportunity for the secretive communist government to continue their army’s buildup and dilute the dollar?

  4. Connor
    November 18, 2008 at 8:45 am #

    China has now surpassed Japan as the largest holder of US Treasuries.

    Our new motto:

    “America’s prosperity: Made in China”

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